The personal exemption phase-out and Pease provision both rely on a calculation on the 1040 tax form

known as adjusted gross income, or AGI.

AGI is figured by taking your total income and subtracting certain payments, including moving expenses, tuition, student loan interest and IRA deductions.

"It's basically a measure of income potentially subject to tax," said Roberton Williams, a senior fellow at the Urban Institute. "This is before you've adjusted for deductions."

Personal exemptions -- $3,900 each for yourself, your spouse and your dependents -- and itemized deductions like medical costs, mortgage interest and money donated to charity are subtracted after AGI has been calculated.

When personal exemptions and itemized deductions have been subtracted from your AGI, the result is your taxable income, the final amount use to calculate your tax liability.

"The whole front side of your 1040 is used to figure out what our AGI is," Williams said. "The biggest problem for most people isn't figuring out the tax side, it's figuring out the income side." - Matt Connolly